Sunday, 18 August 2013

The Patent Box - Legislation, consultation, debates and Anne Fairpo on tax planning

In my report of the 3 May 2013 on the patent box workshop which we held  in Liverpool on 29 April 2013 I said that patent box was a tax concession to encourage research and investment in the UK. On our dedicated Patent Box blog I have inserted links to the legislation and the consultations and parliamentary history of this legislation.

Where to Find the Law
The basic provision is s.19 of the Finance Act 2012.   This section states that Schedule 2 contains provision about the treatment for corporation tax purposes of profits arising from the exploitation of patents etc.  This Schedule inserts a new Part 8A into the Corporation Tax Act 2010. The concession is summarized in a new s.357A (1):
"A company may elect that any relevant IP profits of a trade of the company for an accounting period for which it is a qualifying company are chargeable at a lower rate of corporation tax."
The following sections then define "qualifying company" and "relevant IP profits" and set out how the charge is to be made.

Legislative History
In order to better understand the policy behind this legislation I have linked to a presentation by the Treasury and HMRC which was given at an open event on 11 Jan 2011 in which the proposals were discussed in the "Presentations" panel of our Patent Box blog. I have also linked to the consultation document "The taxation of innovation and intellectual property", the response to the consultation and the minutes of a working group on the parent box which consisted of representatives of a number of leading companies.  A second consultation took place in June 2011 and there was another open event specifically on the patent box on 10 Jan 2012.  Finally I have included a link to the debate in Committee on the provisions relating to the patent box in the 2012 Finance Bill on 12 June 2012 as reported in Hansard.

Overview
For an overview on the legislation I commend the presentations by Dan Brookes, Vince Walker and Howard Veares of BDO given at our Patent Box Roadshows in Leeds, Liverpool and London earlier this year. There are also presentations by me and Michael Sandys, head of commercial law at Broudie Jackson Canter on patents and licensing.

Further Information
We are now looking at the patent box in more detail and I am delighted to announce that my colleague Anne Fairpo of Atlas Tax Chambers will speak on tax planning for the patent box at a seminar on the topic that we are organizing at Liverpool in London with our good friends Broudie Jackson Canter and Filemot Technology Law between 12:00 and 14:30 on 13 Sep. Anne as many of you know is an authority on the patent box and IP and taxation generally having written Taxation of Intellectual Property which is already in its third edition and contributed the chapter on taxation to Copinger & Skone James on Copyright.  She also keeps the IP Tax blog. Anne will be supported by Barbara Cookson of Filemot and Michael Sandys of Broudie Jackson Canter who will talk about patenting and licensing respectively and the professional services that their firms offer.

Coming to the Event
Although the event is in London it will take place on Lancastrian or at least Merseyside soil as Liverpool in London is popularly called the Liverpool embassy.  Our other speakers, Barbara Cookson and Michael Sandys, are from Blackpool and Southport respectively.  I will chair the event and I am a proud Mancunian (or should that be Mancunienne).  Lunch and the meeting room will be provided by Broudie Jackson Canter,  of Liverpool so this is very much a North West project showing off our region's expertise to the rest of the nation. The event is free but as we have space for only 15 people so if you want to come you have to book in advance. You can do this through Eventbrite at https://fairpo-on-the-patent-box.eventbrite.co.uk/.

A Travel Tip
If like me you live outside a big city and hate fighting your way through rush hour traffic to park at an overpriced car park to catch an even more overpriced train to the Smoke, here is a tip that I have picked up. Drive to Luton Parkway (the station for Luton airport).   It takes me just over two and a half hours from Holmfirth keeping just within the motorway speed limit but then it would take at least one and a half hours to get to Piccadilly or Sheffield stations not counting looking for parking at 08:00 and queuing to pick up a ticket from one of the solitary ticket collection machines.  I have a comfortable drive listening to music - a lot of Tchaikovsky and Chopin and other favourite ballet scores which always put me in a good mood.  I then park at the multi-storey at Luton Parkway station which costs £3 per day if you arrive after 10:00 on a weekday or £2 at weekends. Luton Parkway Station is less than 100 yards away and there are several fast trains an hour to and indeed through London to Surrey and Sussex if you are so inclined with First Capital Connect (also called "Thameslink").. I can tell you for nada, nothing and nowt that Thameslink is a heck of a sight better than the Trans Pennine Express any day of the week.  If you have a railcard and don't mind travelling back before 16:00 or after 19:00 it costs £9.48 with a railcard. Magic!

If you are coming to hear Anne speak on tax planning for the patent box on the 13 Sep 2013 you would take the Thameslink to Blackfriars and then change to the District to Tower Hill. Another tip - get yourself an Oyster card if you haven't already got one for it will save you lots of lovely lolly in London.  Royal Mint Courts are a few hundred yards from the tube and you have to cross a couple of busy roads to get to them. Once there ask the chappie at the entrance to the complex to point out the building that contains Liverpool in London.   I think it is called the Johnson Smirke Building. You can easily miss it - as Atlas's senior clerk did last time but then he is a Yorkshireman - because there is no signage outside.   Report to the front desk and they will ring up for someone to meet you.   You can't wander around the building because of typical Southern paranoia over security.  As you know, they can't say "boo" to a goose down there because they are as soft as putty.

How we can help with your IP and Tax Questions
Returning to IP and tax, we are one of the few chambers with expertise in both areas of law. Atlas Tax Chambers are a separate set but they share our premises, clerks and other facilities and work very closely with us. If you want to consult me or any other member of our IP, tech or media law group or Anne or any other member of Atlas on tax you can call us on 0161 850 0080 as well as 020 7404 5252. Unless you want to go down anyway to support City, United, Liverpool, Everton or whatever team your follow, catch a text match at Lords or the Oval, take your wife or husband to Harrods sale or Wimbledon, the kids to a show or museum or enjoy any of the other wonderful things London has to offer such as the Royal Ballet, English National Ballet, Ballet Black etc we can save you the traipse down by seeing you in Manchester. We have an arrangement with one of the leading Manchester sets to hold conferences at their premises. As always, if you want further information fill out my contact form, send me a tweet, write on my wall or send me a message through G+, Linkedin or Xing.